National Biodiesel Board at loss to explain doubling of soy prices; reserves at high levels; blames speculators

April 29, 2008

“It’s not following any linear economic path,” Amber Pearson, a spokesperson for the National Biodiesel Board, told news.com as soy prices have doubled in the past two years, to 60 cents a pound. The NBB said that numerous plants had been idled by high prices, while Fred Tennant of PetroAlgae said “The numbers are impossible.” The NBB is at a loss to explain why prices have risen so dramatically when available stocks of soy are close to all time highs. “Maybe some of the (price increases) are due to speculations and futures markets,” Pearson said.

“I think you have a perfect storm of things coming together,” World Bank president Robert Zoellick told NPR. “You have high energy prices. You have the increase in demand from some of the developing countries. … As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot.”

Leading the price rise was crude oil, which reached a record $120 yesterday. Crude palm oil reaching $1079 per tonne, soybeans at $13.56 per bushel for May delivery, wheat at $9.23 per bushel and corn at $5.94 per bushel for May delivery. A Goldman Sachs research report projected that soy prices would rise to $15.30 in six months, and that wheat would peak at $11.50 per bushel in the same time period.

Commenting on the oil market, Stephen Schork, president of the Schork Group, told Oil Voice that reported that â€œThis is a market that’s being driven by speculation as much as it is by the fundamentals.â€

Today in Biofuels: $1.01 US tax credit for cellulosic ethanol proposed in Senate; Florida moves to E10; Brazil’s Brenco to raise $3.2 billion in IPO

Top Story:A report from Raymond James analyst Pavel Molchanov said that "the reduction in the [ethanol] tax credit is not likely to have a direct impact on ethanol producer margins, if only because th...

Bakken formation oil reserves fall well short of hopes, reviving “peak oil” concerns

In North Dakota, estimates from the US Geological Survey on the size of the Bakken Formation oil field fell well short of expectations. The USGS projected recoverable reserves of 3 billion to 4.3 bill...

Minnesota government to investigate ethanol water usage after Granite Falls plant begins drawing water from Minnesota River

In Minnesota, the state Environmental Quality Board will examine water usage by ethanol plants after a plant in Granite falls, which had been allocated sufficient groundwater for its proposed needs, b...

India to miss biofuels target by 40 percent; sugar blames oil, oil blames government

In India, government officials are admitting that the country is likely to reach a 3 percent biofuels target, compared to the national target of 5 percent. The country is scheduled to move to a 10 per...

European biodiesel industry slammed by soaring costs, loss of green group support, production glut, loss of tax breaks and US competition

The Wall Street Journal provides coverage of problems in the European biodiesel industry, including a production glut, soaring costs, loss of support from green groups over the use of Malaysian and In...

Germany’s Verbio announces loss, says unable to compete with Brazilian ethanol due to high grain prices

German ethanol producer Verbio said that it is unable to compete effectively against cheap imported ethanol from Brazil, and asked for protection from the national government. The company announced a...

Written by Jim Lane · Filed Under Producer News